All posts tagged TNK-BP

MOSCOW — Russian state-controlled oil giant OAO Rosneft’s $55 billion deal to buy TNK-BP and become the largest publicly traded oil producer has left analysts and investors scratching their heads.

Where will the financing come from? Under what terms? What will the new company look like? Can it pay down the debt and maintain dividends and capital spending?

Moody’s Investors Service and Fitch Ratings put Rosneft on review for downgrade Wednesday amid concerns about the debt it will take on. (It will need up to $45 billion in cash for the deals to buy out BP and its partners, the AAR consortium of tycoons.)

But Standard & Poor’s late Wednesday said it was looking the opposite way — at a potential upgrade.

That’s because S&P factors in government support, which it expects to increase now that Rosneft will control about two-fifths of crude output in the world’s largest energy-producing nation. Sabine Gromer from S&P said this “refers to how likely a government would be to step in should an entity need support, be it liquidity, infrastructure or tax relief.” Read More »

MOSCOW — When an arbitration court in the Siberian city of Tyumen ordered BP to pay $3 billion in damages to its Russian joint venture TNK-BP on July 27, court-watchers were left scratching their heads. Eight months earlier, the same judge had rejected the same claims when he first heard the case. (The case was later sent back by a higher court.)

The suit was brought by a group of minority shareholders in a traded subsidiary of TNK-BP, co-owned by BP and four oligarchs. The minorities argued that BP caused damage to the joint venture when it tried last year to seal an alliance with state-controlled oil giant Rosneft without involving TNK-BP. AAR, the four billionaires’ consortium, blocked the deal in separate legal proceedings, and is now seeking damages through arbitration.

Already-tense relations between BP and AAR were further strained by the failed deal. Rosneft said last month that it was in talks with BP on buying the U.K. company’s stake in TNK-BP, Russia’s No.3 crude producer. Read More »

BP’s troubles in Russia are far from over. That seems to be the message from its Russian partners. Just as everyone thought the storm had passed, they took everyone by surprise and recommended legal hearings against the U.K. oil giant.

The proceedings will center around whether BP breached a shareholder agreement at the TNK-BP joint venture by pursuing an alliance with Russian state oil company Rosneft at the start of the year.

The question is: what are they after this time? The short answer is: money.

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